The answer depends on whether a project has 12 month or 18 month reporting periods, whether reporting periods coincide with financial years, and the point in the financial year that increases occur. Here we assume that increases coincide with the start of the financial year, and project duration is 36 months.
For projects with 18 month reporting periods, the loss will range from about 17% of any cost increase to 44%, with an average of 31%. To put a value on this, assume that personnel costs rise by 2.6% each year – the rate reported by the European Industrial Relations Observatory for collectively agreed nominal pay across 13 EU countries between 2012 and 2013. If personnel costs account for 85% of direct costs, then during H2020 costs claimed including overheads will be €528m lower than using actual personnel costs.
RegardsSingleimage - H2020 Training Workshops and Advice